Taxing the Tax - Exempt? Christian School Asks City for Fair Price on Water Bill

Share Article

Canyonville Christian Academy is asking the city of Canyonville, Oregon to reconsider its practice of doubling its water bill on all Churches, Schools and non profits. The school has filed a motion before the Douglas County Circuit Court asking for a ruling on the issue. The case is being closely watched by churches and non-profits nationwide.

We offered to settle this for a very modest amount last Christmas but the city said ‘no.’

Canyonville, Oregon (PRWEB)March 19, 2012

City Ordinances 603 and 605, two of the 600-plus ordinances for the city of Canyonville, Oregon state that “churches, schools, and non-profits like our local YMCA and a non-profit senior residence will be charged double the normal water rates and substantially elevated sewage fees.” One of the current ordinances explains that the surcharges are to be paid “in lieu of taxes.”

Several months ago, officials at Canyonville Christian Academy stumbled onto the surcharges, finding that they have been double billed for water use for more than three decades. The total amount of over payment may be close to $150,000. The school headmaster, Cathy Lovato, says “We offered to settle this for a very modest amount last Christmas but the city said no.” The school, founded in 1924, operates on a modest budget. In 1995 it voted to close its doors. Alumni and friends donated money to help the school rebound.

The school was told by city officials that the practice was legal and proper. City ordinance number 593, Section 1, paragraph G and H states that: Schools / Churches shall pay $57.10 per month for the first 1,200. cubic feet, plus $.03214 per cubic foot over the base of 1,200 cubic feet. In addition, schools / churches shall pay $11.04 per month in lieu of taxes.

Although the ordinances are written to broadly cover all non-profit water users, CCA believes that the city regulations have principally targeted ten churches and four Christian schools with the biggest bill going to the Canyonville Christian Academy.

Last June CCA notified the city government that it had discovered the improper billing but according to the Academy nothing has been done to fix the problem. According to CCA, the city has held four executive/closed council meetings with their legal counsel present.

Doug Wead, a New York Times bestselling author, and Chairman of the Board of CCA says that the school has consulted with the Oregon Attorney General, a state legislator, multiple mayors of other cities, and multiple law firms. According to Mr. Wead, “To my knowledge, no one has advised CCA that the double charges on churches and church schools is legal. Many seem to believe that this is a clear violation of the U.S. Constitution.”

On October 19, 2011 CCA offered to resolve the issue by taking a small fraction of the amount of overcharges of the last six years in the form of credits on future bills. Of course, the school also asked that the city desist in the double charges. Ms. Lovato says that the city notified the school on December 13, 2011 that their offer was rejected. Meanwhile, the surcharges on nonprofits by the city continues and is reflected in the most recent water bill mailed to CCA this month.

According to Ms. Lovato, “One of our staff asked a senior city official a year ago about the rationale and legality of the surcharges, and why they were doing this and he replied, ‘We do it because we can.’”

Canyonville is a small town in Southern Oregon with a population of 1,700. The Douglas County Circuit Court in Roseburg, Oregon will make a ruling on the issue (Case #12CV0750CC). Officials at CCA believe that if the Court upholds the City Government, it may provide other city and county governments with a backdoor method of taxation on churches and non-profits. The case is being followed anxiously by churches and non-profit lawyers nationwide.